Correlation Between Golden Star and HUMANA

Can any of the company-specific risk be diversified away by investing in both Golden Star and HUMANA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Golden Star and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Star Acquisition and HUMANA INC, you can compare the effects of market volatilities on Golden Star and HUMANA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Golden Star with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and HUMANA.

Diversification Opportunities for Golden Star and HUMANA

-0.28

Correlation Coefficient

Golden Star  HUMANA

Very good diversification

The 3 months correlation between Golden and HUMANA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Golden Star is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Golden Star Acquisition are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Golden Star i.e., Golden Star and HUMANA go up and down completely randomly.

Pair Corralation between Golden Star and HUMANA

Assuming the 90 days horizon Golden Star Acquisition is expected to generate 2.17 times more return on investment than HUMANA. However, Golden Star is 2.17 times more volatile than HUMANA INC. It trades about 0.03 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.16 per unit of risk. If you would invest  1,123  in Golden Star Acquisition on September 13, 2024 and sell it today you would earn a total of  26.00  from holding Golden Star Acquisition or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Golden Star Acquisition  vs.  HUMANA INC

Golden Star Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with Golden Star and HUMANA

The main advantage of trading using opposite Golden Star and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, HUMANA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HUMANA will offset losses from the drop in HUMANA's long position.

The idea behind Golden Star Acquisition and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.